ED Kakao's update woes

KakaoTalk

KakaoTalk, the ubiquitous messenger app, will roll back its first major update implemented in 15 years. Users were up in arms after the company unveiled the update last week, which changed the familiar, alphabetically listed format for the Friends tab into a grid-style scrolling feed similar to Instagram.

Kakao Corp. said the update was intended to evolve the service into a comprehensive social media platform. It was supposed to increase use time on the app, which would allow for the placing of ads, thus benefiting the company. But users clamored for the simple functionality of the messaging app, and the company backed down earlier this week, saying it will bring back the list-style format for the Friends tab on the main app page and move the new feed-style posts to a separate one.

Kakao, a tech giant, has every right to pursue change and profit. The nation's 15th-ranked business, however, stumbled with the update. Criticism centered around the company's move to make profits while knowing its users are long-accustomed to the simplicity of the messenger app and cannot change their habits easily.

The recent blunder, however, may have revealed deeper flaws in Kakao's decision-making process, including a possible emphasis on expediency that overlooked privacy issues.

The media in August had reported on the change to KakaoTalk's interface that would make it similar to Instagram. However, anonymous reports from company employees suggested that the new update, dubbed the "Big Bang Project," was reportedly carried out almost unilaterally without much user feedback or interaction within the company.

The core of Kakao's business is the messenger app, which might as well be Korea's "national" messenger. Kakao should have taken the loyalty of its users and their privacy more seriously. This display of consumer resistance should be a lesson to Kakao Corp. — it failed to fully factor in the sociocultural aspects of how people actually use the messenger. Unlike other social media platforms such as Instagram, where users explore feeds based on their interests, KakaoTalk enables users to message friends as well as bosses or colleagues, using contact lists almost like a phone book. Many users complained about not wanting to share more private content, such as schedules or personal photos, with their bosses or colleagues. There were especially deep concerns about intrusion of privacy.

The company's stock prices have taken a hit since Sept. 23, declining sharply since last Tuesday and recovering only slightly earlier this week.

Kakao Corp. is a homegrown tech giant started by former developer Kim Beom-su. Since its founding in 2010, the company has said it would work to make a better world, but has faced criticism for its aggressive expansion including into industries typically run by small businesses owners; its affiliates now number more than 124. When crises rose, the company pledged overhauls and revamps, with Kim changing titles. Kim, who is now overseeing only future strategies, is currently on trial on charges of stock manipulation during the process to acquire SM Entertainment, in efforts to thwart rival purchaser HYBE Entertainment. Several other executives are also facing same charges.

Kakao is now at a juncture where it must review its decision-making processes while the risks associated with the founder/former chairman loom over the brand. The immense reputation of KakaoTalk's services can survive this misstep, and there are still bastions of support for self-made businesses. The company has pledged that the rollback will be executed by the end of the year. The real test will be what happens after.